RPG goes digital to integrate all group functions

Like last year, the company is investing at least Rs 27 crore this year in pushing for digitalisation and says the returns have started coming in.Devina Sengupta | ET Bureau | Updated: June 21, 2016, 14:30 IST

RPG Enterprises, the tyre-to-IT conglomerate, plans to ring in a comprehensive digital change across its businesses that would integrate all the group's functions across products, clients and even monitoring and rating of employees of the Mumbai-based group.

“Digital has become a way of life and key differentiator in RPG group," said chairman Harsh Goenka.

Like last year, the company is investing at least Rs 27 crore this year in pushing for digitalisation and says the returns have started coming in. The investments are not a fixed amount, said the group.

From this year, all board meetings in the business house have become completely digital. All decisions, discussions, points jotted down by Board members are on apps created for each company leaving no paper trail.

Eager to shake off the brick and mortar image, conglomerates like Tata Sons, RIL, Aditya Birla Group and Mahindra have marked out the need to go digital to keep up with the changing economic scenario and move into newer ventures. However, analysts say that conglomerates need to realise that going 'digital' is not a one-time activity .

“It is a moving post and groups need to see their impact in business. Providing gadgets is not enough, how much sales growth has happened because of it is what matters," says Sanchit Vir Gogia, CEO of Greyhound Research.

“For all small to medium impact initiatives, where we have invested approximately Rs 4 crore, our cost saving could be to the tune of Rs 25-30 lakh per initiative. For the large impact initiatives, where the investments are in the range of Rs 10-12 crore, the cost savings would be much larger, maybe Rs 4-5 crore," the RPG group said in response to an email query from ET.

The group has hired or transferred five resources in the digital space over the past three months and some were lateral hires like Sachin Nandgaonkar president ­ Speciality Sector, RPG Enterprises, who was brought in from Accenture last year.Success in pushing digital business will be 20% of Nandgaonkar's target.

“Companies need to get digital experts who can bring in the funds and every function needs to think the 'digital' way. It should not be confused with technology and for that one needs to hire experts who can help the group understand the larger picture, measure the change and have a defined outcome," added Gogia.

RPG's tyre firm CEAT, for example, is working on sensors that will measure the condition of tyres and mark the location and spot any problem with it.

CEAT has invested Rs 13 crore to make their plant in Nagpur completely digital. In the plant, if any wrong material comes in, the machinery in the entire factory will shut down. Chances of errors go down, says the chairman, who hired consultants for the new factory .